HM&P lawyer shares insights on cross-border OTT television business in Vietnam

On January 24, 2025, in an online interview with the Voice of Ho Chi Minh City People (VOH), Lawyer Nguyen Nhat Duong, representing HM&P Law Firm (“HM&P”), provided an in-depth analysis of the cross-border Over-the-Top (OTT) television business, its challenges, and solutions to create a fair, transparent, and legally compliant business environment in Vietnam. According to Lawyer Duong, the rapid advancement of digital technology has fueled the growth of the OTT model in Vietnam, attracting an increasing number of foreign enterprises while posing significant challenges to the legal framework, domestic businesses, and consumer rights.

The strong growth trend of the OTT television market in Vietnam

OTT television refers to content distribution via the internet without relying on traditional cable or satellite television networks. Platforms such as Netflix, YouTube, Amazon Prime Video, and Disney+ have demonstrated the global appeal of this model. Vietnam is no exception to this trend, with the OTT television market experiencing continuous growth, generating revenue from VND 200 billion in 2021 to VND 1,550 billion in just the first six months of 2023. However, amid an incomplete legal framework, this rapid expansion raises multiple issues related to content regulation, intellectual property rights, consumer protection, and tax obligations.

Legal challenges for domestic enterprises

First, while the strong presence of OTT platforms brings significant benefits to consumers, it also poses major challenges for domestic businesses. Companies such as MobiTV and MyTV face difficulties competing against foreign enterprises with superior technology, financial resources, and extensive content libraries.

Second, copyright infringement has become an alarming issue, with unauthorized platforms providing unregulated content while attracting a large user base due to their fast updates and exemption from legal obligations in Vietnam. This makes it challenging for businesses that comply with copyright laws to reach customers and maintain sustainable revenue.

Third, regarding tax obligations, many cross-border OTT platforms have yet to fully comply with Vietnam’s value-added tax (VAT) and corporate income tax (CIT) regulations. This results in significantly lower operational costs for foreign enterprises compared to local businesses, creating an uneven playing field.

Regulatory framework for OTT television services in Vietnam

According to Lawyer Nguyen Nhat Duong, foreign businesses seeking to operate legally in Vietnam must comply with the following key legal regulations:

• Cybersecurity Law: Requires platforms to store user data within Vietnam and establish a local representative office to ensure compliance with data security regulations.
• Telecommunications Law: OTT service providers must register their operations with the state authority responsible for telecommunications management.
• Press Law & Advertising Law: Content broadcasted on OTT platforms must be censored to ensure compliance with Vietnam’s cultural and legal standards.
• Tax Law: OTT platforms generating revenue from the Vietnamese market must fulfill tax obligations equivalent to domestic enterprises.
• Intellectual Property Law: OTT platforms must obtain legal licenses for content distribution to avoid copyright violations.
• Consumer Protection Policy: Platforms must provide clear information on service terms, ensure transparency in payment transactions, and commit to protecting personal data.

Challenges in legal compliance for cross-border OTT enterprises

Despite Vietnam’s efforts in issuing regulatory frameworks to govern the OTT market, monitoring and enforcement remain challenging. Key obstacles include:

First, absence of a local representative office or branch in Vietnam: Under the Cybersecurity Law, foreign OTT platforms are required to establish a local office or branch in Vietnam. However, most have not yet complied with this regulation.

Second, requirement for a Pay-TV service license: Vietnam has not fully opened its OTT market under WTO, CPTPP, and RCEP commitments. Foreign businesses can only participate through joint ventures with Vietnamese companies, with foreign ownership limited to 51% of charter capital. Additionally, foreign-invested enterprises seeking to provide pay-TV services must:

• Establish a company in Vietnam or partner with a licensed Vietnamese entity.
• Obtain approval from the Prime Minister before applying for an operational license.

These regulatory conditions create significant legal barriers for foreign enterprises looking to establish a commercial presence and obtain business licenses in Vietnam’s OTT television sector.

Source: Stock Investment Newspaper

Solutions and regulatory directions for managing the OTT television market

Lawyer Nguyen Nhat Duong emphasized that to balance market growth and protect domestic enterprises, the government should implement stricter regulatory measures, including:

First, enhanced legal oversight of cross-border OTT platforms, requiring business registration, full tax compliance, and adherence to content regulations.

Second, promoting international cooperation by engaging in agreements on intellectual property and e-commerce to facilitate transparent and lawful operations of foreign OTT enterprises.

Third, strengthening cybersecurity and data protection by developing robust regulations to safeguard user information and enhance safety standards for OTT services.

Fourth, supporting domestic enterprises through tax incentives and technological investments to improve competitiveness.

OTT television services are an inevitable trend in the digital age. However, their expansion in Vietnam must adhere to legal regulations to ensure fair competition, protect consumer rights, and enhance the competitiveness of domestic businesses.

With extensive expertise in telecommunications, intellectual property, and taxation, HM&P is committed to supporting businesses with comprehensive legal solutions, particularly in the OTT television and cross-border service sectors, ensuring legal compliance and sustainable development in a challenging business environment.

HM&P extends its sincere appreciation to Voice of Ho Chi Minh City People (VOH) for providing the opportunity to share valuable insights with the business community. We hope that HM&P’s analysis will contribute to raising awareness of legal regulations and assisting OTT television businesses in formulating effective strategies that align with Vietnamese laws and safeguard their interests.

Please follow the link below for the detailed content of this interview:

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